Testing the Boundaries of Consumer Research

By Herb Shields | 04/05/2012
| 9:14 AM

Several recent articles have addressed what companies are doing to mine information on consumers and trends from data and in-store observation. There have been articles about Target’s efforts to track customers and predict what they might buy, then send coupons, etc. An article in The New York Times Sunday magazine in February stated: “Almost every major retailer from grocery chains to investment banks to the U.S. Postal Service, has a predictive analytics department devoted to understanding not just consumers shopping habits, but also their personal habits, so as to more efficiently market them.” Target was featured in the article, but chose not to comment directly. Marketers are also making efforts to better use data. McKinsey Quarterly recently published a very interesting article that discussed Proctor & Gamble’s efforts to better use all of the data available to it.

A former colleague of mine, Ralph Blessing, Executive Vice President, GfK Custom Research,LLC.had this to say about the subject: “Digital technology is influencing market research in many different ways - from data collection which is much more immediate and mobile to understanding behavior in much deeper ways throughout the entire shopping process (from purchase consideration, researching, shopping, buying, using and post use). As this occurs the industry also has to be much more thoughtful and careful about maintaining confidentiality. For example, many companies use net mining (or netography) which can yield very rich insights, but can also unearth potentially sensitive information.”

“It raises all sorts of privacy, security and ethical issues about what is appropriate to collect, use, and 'sell' as well as how to use the information. Consumers will certainly react very negatively if the power of this information is misused and feels evasive or leeks out something they feel is private. Retailers should be highly transparent and cautious before over-zealously using the data and power they now possess.”

Stay tuned for more discussion on this topic. As Ralph said, it is something that responsible companies are addressing in an effort to provide what consumers want without over-stepping bounds in many important areas.

Comments

Testing the Boundaries of Consumer Research

Several recent articles have addressed what companies are doing to mine information on consumers and trends from data and in-store observation. There have been articles about Target’s efforts to track customers and predict what they might buy, then send coupons, etc. An article in The New York Times Sunday magazine in February stated: “Almost every major retailer from grocery chains to investment banks to the U.S. Postal Service, has a predictive analytics department devoted to understanding not just consumers shopping habits, but also their personal habits, so as to more efficiently market them.” Target was featured in the article, but chose not to comment directly. Marketers are also making efforts to better use data. McKinsey Quarterly recently published a very interesting article that discussed Proctor & Gamble’s efforts to better use all of the data available to it.

A former colleague of mine, Ralph Blessing, Executive Vice President, GfK Custom Research,LLC.had this to say about the subject: “Digital technology is influencing market research in many different ways - from data collection which is much more immediate and mobile to understanding behavior in much deeper ways throughout the entire shopping process (from purchase consideration, researching, shopping, buying, using and post use). As this occurs the industry also has to be much more thoughtful and careful about maintaining confidentiality. For example, many companies use net mining (or netography) which can yield very rich insights, but can also unearth potentially sensitive information.”

“It raises all sorts of privacy, security and ethical issues about what is appropriate to collect, use, and 'sell' as well as how to use the information. Consumers will certainly react very negatively if the power of this information is misused and feels evasive or leeks out something they feel is private. Retailers should be highly transparent and cautious before over-zealously using the data and power they now possess.”

Stay tuned for more discussion on this topic. As Ralph said, it is something that responsible companies are addressing in an effort to provide what consumers want without over-stepping bounds in many important areas.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Herb Shields

Herb Shields has run Chicago-based HCS Consulting since 2000, helping clients across multiple industries and in higher education improve their supply chain strategy and execution. Shields has more than 30 years as an operations executive for capital equipment, automotive, electrical machinery and consumer products companies. As vice president of materials management at consumer goods company Helene Curtis, Shields led the supply chain organization that helped Helene Curtis win "Vendor of the Year" awards from Wal-Mart Stores and Target Corp. Shields has a B.S. degree in Electrical Engineering from Clarkson University and did graduate work in business at Bowling Green State University.